A Portfolio Consists of Securities a and B in the Proportions

question 21

Multiple Choice

A portfolio consists of Securities A and B in the proportions of .7 and .3. Security A has a random error standard deviation of 7%; Security B at 11%. The portfolio beta is 1.2, and the market standard deviation is 10%. The total portfolio variance is

• A) 158.
• B) 204.
• C) 265.
• D) 179.

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Definitions:

Cognitive Functioning

Mental processes involved in gaining knowledge and comprehension, including thinking, knowing, remembering, judging, and problem-solving.

Primary Aging

Aging that involves universal and irreversible changes that, due to genetic programming, occur as people get older.

Functional Age

An individual's age based on physical, emotional, and cognitive capabilities, rather than chronological years.

Major Illnesses

Serious health conditions that have a substantial impact on a person’s life, often requiring long-term management or treatment.